When you are in the thick of selling your business, you will be answering buyer questions, broker questions, attorney questions, accountant questions…the list goes on. It is also important that you ask a few questions of your own, especially of the person who may buy your business.

What kinds of things should a seller ask a buyer?

The person buying your business will be taking over for you and hopefully continuing all of the hard work you’ve put in during your time as owner. It is important to find out a few things about this new person, especially if you are going to be offering seller financing. You will need to be able to trust that this buyer has what it takes to keep the business open long enough to pay you back. Here are a few of the questions a seller should ask any potential buyer:

Have you ever owned a business before? If yes, then what happened to that business? This question will help to establish that this is a person who knows the kind of commitment of their time and energy business ownership requires. If the buyer has never owned a business before, don’t be tempted to write them off. Many people have the drive necessary to own their own business. Remember that at some point you were a rookie business owner too. 

Do you have any experience in this industry? Why do you want to own a business in this industry? It is always ideal, although not absolutely necessary, to buy a business that is within your knowledge base because it allows you to start with experience under your belt instead of at the ground floor. This question will help you determine from the get-go what kind of training and consultation periods are going to be required for this buyer.

How do you plan to finance this business? Would you require seller financing for this business? Are you a cash buyer? These questions should have already been asked and answered by the business brokers involved long before your first meeting with a buyer, but it is always good to get an answer straight from the source, especially because circumstances may have changed since the question was last asked.

As you move through the process of selling your business, just remember that you have the right to ask questions too.

Are you a business seller who is curious about the kinds of questions a seller should be asking? Do you have questions about what kinds of answers you should be looking for? Please leave us a comment or question here, and we will be happy to assist you.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

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If you are a business seller, get ready for a low-ball offer.

It is more than likely that you will get at least one offer that you consider far too low. The key to turning a low-ball offer into a successful sale? Attitude.

It can feel pretty insulting when a complete stranger takes a look at the the business where you’ve invested you blood, sweat and tears and comes back with what you would consider a ridiculously low offer.

Business is an impersonal game, and when you sell your business you will need to take your emotions out of the game if you want to be successful.

Don’t look at a low-ball offer as an insult, look at it as a starting point. The listing price of your business should never be the very minimum that you are willing to take, it too is a starting point for buyers.

The business transaction process is called a process for a reason. There will be a lot of back and forth between the parties involved over everything from the closing date to the bottom line. If you go into the process with the goal of getting to the closing table, you will be far more successful than if you go in with the attitude that everything must go your way. Also realize that not all buyers are going to think that coming in too low would offend a seller, so keep a good-faith attitude throughout the process about the other side.

Once the initial offer is in play, you can begin the process of negotiating for a price that is acceptable for both parties. This is a great time to be using the services of a business broker because they can do the impersonal negotiating for you.

During these initial negotiations you will be able to tell pretty quickly if what you have is a serious buyer who is truly motivated to buy your business. If they are a serious buyer, they will be inclined to back up their offer with the reasoning they used to arrive at that price, and will be willing to meet you somewhere in the middle. If they aren’t, then you can move on.

Again, it is critically important that you treat all offers, at least initially, as serious offers and that you deal with all parts of the business selling process without getting your emotions involved. Keep you eye on the goal of getting to that closing table and you will have a much more successful transaction.

Are you a business seller who keeps getting low-ball offers? Are you having a hard time staying objective? Please feel free to leave us a comment or question here, and we will be happy to help you get to the closing table successfully.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

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No matter what you’re selling, it becomes exponentially more difficult to sell something that is broken than something in proper working order. It should also go without saying that it is very unethical to try and pretend a broken thing works when trying to sell it to another person.

These basic sales truths hold true in the small business market as well. If your business is a sinking ship that you are trying to escape from – you have only two options. Fix it, or disclose it.

What do we mean by this?

Let’s say your business owes an enormous amount of money to vendors or the IRS. You might think you have to hide ugly debt and pass the buck onto the next owner, but it won’t work. It will absolutely come out during the due diligence process. Your choices here are to pay the debt, or (if paying the debt is impossible) be upfront with prospective buyers about how much money the business owes. You might be surprised that for the right business opportunity buyers may be willing to deal with the debt in order to buy your business. If you try to go the other route and hide the issue, your deal will absolutely fall apart.

What if you have a ton of broken equipment? It might seem silly to spend a ton of money upgrading equipment you aren’t personally going to use, but if you were selling a house you’d probably paint and fix broken fixtures or doors. The same holds true for a business. Think of upgrades before selling as a way to strengthen the price of the business. A buyer isn’t going to pay top dollar for broken stuff, but they might if everything is working and/or new. Don’t take the chance and try to conceal broken equipment – you’d better believe buyers are going to figure it out and come after you.

These are just two examples, but there are many more skeletons that can lurk inside of small businesses. The message here is you absolutely, positively must be honest and upfront about why you are selling and what is wrong in your business. Problems aren’t necessarily the kiss of death for business deals, they are simply just points of negotiation. Hiding problems, on the other hand, will mean your business will never sell.

Are you thinking about selling but are worried about what buyers might find? Do you think the flaws in your business are deal-killers? Would you like to know more about how to turn flaws into negotiation points? Please feel free to leave any questions or comments here and we would be happy to help.

Michael Monnot

941.518.7138
Mike@infinitybusinessbrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

https://infinitybusinessbrokers.com

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Successful entrepreneurs share one very important thing – passion.

They have the drive to get up every morning and push their business to success.

Business owners who intend to hand their family business on to the next generation should consider that passion for your business isn’t something you can pass on when you give someone the keys.

Your children may have worked in your business since they were very young, but ask yourself this: if they could have chosen to do anything, would they choose to do this?

What happens when a family business is handed down to someone who either lacks the drive to be a successful entrepreneur or doesn’t really want the business they are given? The business takes a nose dive and dies. We’ve seen it happen many, many times.

Want a better outcome and future for both your business and your kids? First and foremost, ask your children about their own passions. If running your business for the rest of their working life doesn’t make the list – sell your business instead.

Selling means you can get a return on the personal investment you’ve made in your business. You can use that money to enjoy your retirement or perhaps to invest in a business that your children actually want. This way you can continue the entrepreneurial tradition of your family while preserving your children’s potential for success by allowing them to do something they really want to do.

Don’t let an unwilling heir run your business into the ground. Sell instead!

Are you worried that your children don’t have the drive to run your business once you retire? Would you like to know more about how to sell and then reinvest in a business where they could be successful? Feel free to contact us today.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

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As a business owner, you are your own Board of Directors, as all major business decisions are made by you alone. This can be a big job, especially because you may be an expert at running your own business, but you are not an expert at everything.

Who do you turn to when you need an expert’s advice?

For many small business owners, the answer is simple; you turn to your accountant or your attorney for help. Is this a good idea? It absolutely is in some circumstances, but there are important caveats for using this advice.

What about my attorney?

Your attorney is probably very specialized as almost all attorneys are. This specialization in the legal field is only going to help your business if you are using the appropriate attorney for the appropriate reason. You should have a business law attorney as your primary counsel, and then employ a more specific attorney if necessary, like a business litigation attorney if you are party to a lawsuit or an attorney who specializes in labor laws for a labor dispute.

What if you want to sell your business?

If you are looking to sell your business, then you will need an attorney who specializes in business transactions.

Why not just use your primary business attorney?

There are a few reasons. First, business transactions require specific knowledge just like any other area of the law, so a business transaction attorney is going to be the most knowledgeable.

Second, selling a business, like all other business related decisions, comes with a bit of risk. The job of your primary attorney is to protect you from any and all risk, so they are likely to advise you against your own business sale because of the inherent risk. Non-transaction attorneys kill business deals every day, deals that would have been fine had the appropriate counsel been sought.

Third, transaction attorneys are more efficient at negotiating and closing business deals than an attorney who has never closed a business deal before. It will mean less billable hours and more money in your pocket if you use a transaction attorney instead.

What about your accountant?

Accountants are different from attorneys because they are typically not as specialized, although you should really use as your primary accountant a CPA who has experience in your particular industry. Your primary accountant should be able to help you organize your financials and prepare your tax returns.

What your primary accountant should not do is give you a valuation for your business, or give you a valuation for any business you are looking to purchase.

Why? Business valuations are complex, and there are accepted methods for preparing a business valuation that an accountant who does not specialize in this field will not know. Typical valuations done by an unqualified accountant leave business owners with unrealistic expectations in the business market. Avoid this pitfall by hiring an accountant who specializes in business valuations.

The message here is you should absolutely listen to the advice of your attorney and accountant, but only if they are giving you advice within their realm of expertise. Hire a team of experienced professionals, and then only use each for what they specialize in. In the long run, it will save you from suffering the consequences of uninformed advice.

Are you a small business owner who has dealt with the consequences of uninformed advice? Leave us a comment or question here, and we will be happy to assist with getting you more informed answers.

Michael Monnot

941.518.7138
Mike@InfinityBusinessBrokers.com
12995 South Cleveland Avenue, Suite 249
Fort Myers, FL 33907

http://www.InfinityBusinessBrokers.com

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